Sparrow Barns owns a custom-designed barn called the “White Sparrow,” that is used primarily for weddings and other special events. On two separate occasions, the owners of Ruth Farm visited the Sparrow Barns’ venue. During the first visit, the owners of Ruth Farm had booked a private tour with their daughter for her “upcoming wedding,” where the couple took photographs and took hand-written notes while on the tour. The second visit was during a Sparrow Barn open house, where Ruth Farm’s owners had asked detailed questions about the facility’s construction, and had entered a closed-off area of the venue before being asked to leave. Shortly after these two visits, Sparrow Barns learned that Ruth Farm constructed their own wedding venue called the “Nest”, which Sparrow Barns had found to be quite similar to its own venue. After several attempts at a cease and desist and a failed negotiation, Sparrow Barns filed suit against Ruth Farm for trade dress and copyright infringement. Sparrow Barns alleged there were many similarities between the two venues, including: “internal and external shape, decorative columns, vaulted and beamed ceilings, candelabra chandeliers, picturesque haylofts, window arrangements, wooden flooring, large entrance doors, and rustic whitewash paint.” Sparrow Barns further alleged that after the construction of the Nest, customer confusion grew particularly on social media, where users began mistaking the White Sparrow for the Nest in their comments on and tags of the venues.

The above emergency motion on February 18, 2019. In its motion, Sparrow Barns requested the court to:

(a)… [enjoin] Ruth Farm from] from selling, offering for sale, distributing or advertising in commerce its services displaying the trade dress owned by [Sparrow Barns] and (b) [order Ruth Farm to] remove from commerce any advertisement or offer to sale in commerce its services displaying the trade dress owned by [Sparrow Barns] on its website, social media, and accounts with third parties.

In deciding whether to grant the injunction, the court first had to decide whether Sparrow had a substantial likelihood of success on the merits for its trade dress claim. To succeed on a claim for trade dress infringement, a plaintiff must show that the protected trade dress was (1) inherently distinctive, (2) non-functional, and (3) that the defendant’s trade dress will likely lead to customer confusion. The court found for Sparrow on the likelihood of success on the merits. First, the court found the trade dress was inherently distinctive because its “intrinsic nature serves to identify its source as the White Sparrow.” Sparrow Barn’s description of the venue is that it

features a large, open floor plan with exposed, decorative, wrapped and framed, vaulted wooden beams placed laterally across the wooden cathedral ceiling; exposed, decorative, wrapped and framed wooden columns placed vertically along the wooden side walls; tiered exposed bulb candelabra chandeliers; rustic whitewashing of the wooden interior features; and a stylistic, stacked window display along the back wall.

When Ruth Farm had submitted pictures of other white barns to refute the allegation, the court concluded that there were similarities in only one or two of the features between the White Sparrow and the other barns, whereas between White Sparrow and the Nest shared many similarities. As a result, the court found White Sparrow to be inherently distinctive.

Second, the court found that the above features were not functional because none of those features enable the White Sparrow to operate as a wedding venue. “For example, the White Sparrow could host weddings and events with glass chandeliers, laminate flooring, and a different window arrangement.”

Lastly, the court found that there was more than a mere possibility of confusion: that there was evidence of actual customer confusion. The court considered a number of factors in its consideration, including the similarities between the venues, the previous evidence that of Ruth Farm’s intent, close proximity in the greater Dallas area, and the advertising medium utilized by both companies being primarily social media and the internet.

Once the court found the likely success on the merits, the court further found that Sparrow would suffer irreparable injury, the balance of hardships was in Sparrow’s favor, and the public interest would not be dis-served by an injunction. Therefore, the court granted the permanent injunction.

This case is still in the early stages, but serves as a reminder that visual appearances are protected when they can cause confusion in the ordinary customer’s mind, and social media can provide important evidence.

]]>https://www.socialmedialawbulletin.com/2019/05/federal-judge-limits-advertisement-on-social-media-in-trade-dress-lawsuit/feed/0https://www.socialmedialawbulletin.com/2019/05/federal-judge-limits-advertisement-on-social-media-in-trade-dress-lawsuit/California companies should reevaluate how they classify social media freelancershttp://feeds.lexblog.com/~r/SocialMediaLawBulletin/~3/Ku-UoBFF3Jw/
https://www.socialmedialawbulletin.com/2019/05/california-companies-should-reevaluate-how-they-classify-social-media-freelancers/#respondTue, 21 May 2019 08:00:54 +0000https://www.socialmedialawbulletin.com/?p=2310With companies increasingly turning to social media to meet their advertising needs, employers must take a closer look at how they classify social media consultants and freelancers. Although larger companies may have internal social media departments, many small companies contract outside social media consultants who work on an hourly basis. Typically, companies were able to … Continue reading

]]>With companies increasingly turning to social media to meet their advertising needs, employers must take a closer look at how they classify social media consultants and freelancers. Although larger companies may have internal social media departments, many small companies contract outside social media consultants who work on an hourly basis. Typically, companies were able to classify these social media consultants as independent contractors provided that the consultant had the right to control the manner and means of their work.

Last year, in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, the California Supreme Court threw out this standard in favor of a new, more strict test called the “ABC test.” The “ABC test” makes it significantly more difficult for a business to classify their workers as independent contractors. In order to classify a worker as an independent contractor, a company must prove that:

(A) the worker is free from the control of the company in connection with work performance;

(B) the worker performs work outside the company’s usual business; and

(C) the worker is engaged in an independent business of the same nature as the work performed.

The key factor in the ABC test is factor (B)—that a worker does not provide services that are part of the company’s core business. Because this new test applies to all hourly workers, classifying a worker who performs tasks related to a company’s usual business as an independent contractor is unlikely to survive judicial scrutiny.

In May of 2019, a Ninth Circuit ruling and an opinion letter from the California Division of Labor (“DLSE”) made classifying consultants as independent contractors even more difficult. The Ninth Circuit applied the ABC test retroactively to all wage-and-hour cases, and the DLSE opined that the test applies to all claims made under the California labor code. If the courts follow the DLSE guidance, the ABC test will now apply to all lawsuits for failure to provide (1) meal and rest breaks, (2) overtime, (3) minimum wage, and (4) reimbursement of expenses, among others.

Companies using social media consultants in California must carefully re-assess how they classify those consultants. For example, although a retail company or service provider may not technically be in the business of advertising or public relations, it is difficult to argue that those pursuits are not part of their usual business. Advertising is key to selling products and attracting customers. Thus a court may find that social media consultants are performing work that is part of the company’s core business, and must be classified as employees rather than independent contractors.

These recent decisions from the courts, as well as the California DLSE, drive home the fact that classifying hourly workers as independent contractors poses a major liability risk to employers. Although companies will incur additional costs by providing the legally mandated benefits regular employees are entitled to, they will also avoid costly legal fees and judgments resulting from potential wage and hour lawsuits. Companies should carefully balance these costs when determining how to classify their social media consultants.

]]>On March 15, 2019, a federal trial court judge ruled in favor of famous golfer Jack Nicklaus’ company in a case that may be of interest to copyright and trademark owners. (Nicklaus Cos. LLC. v. Bryan Hepler Golf LLC, No. CV-18-01748-PHX-ROS (D. Ariz. March 15, 2019) (2019 WL 1227198).)

The case began in a way that is probably all too familiar with copyright owners: photos and videos owned by the plaintiff began appearing without permission the defendant’s website and were posted by the defendant on social media sites. The plaintiff sent a demand letter to the defendant, but the conduct did not stop.The plaintiff then filed a complaint in federal court, alleging both copyright and trademark infringement. The plaintiff attempted to serve the complaint on the defendant’s statutory agent, but was informed that the defendant was no longer located at that address. The plaintiff then served the state agency that was designated for this purpose (here, the Arizona Corporation Commission). The defendant failed to respond to the complaint.

The plaintiff moved for a default judgment, but requested more than a finding of infringement.

The plaintiff sought, and the court awarded, statutory damages of $150,000. Under the U.S. copyright law, a plaintiff may seek actual damages or may elect to seek statutory damages for infringement ranging from $750 to $30,000 per work, or an amount up to $150,000 per work if the infringement is “willful.” (17 U.S.C. § 504(c)(1) & (2).)

The trial court found that the defendant’s lack of cooperation meant that actual damages were not available to the plaintiff because the defendant held the information necessary for the computation of actual damages. As a result, the court ruled that the defendant’s actions were “willful” and “in light of the valuable intellectual property rights at issue,” the court awarded statutory damages in the amount of $150,000.

The defendant also moved for a permanent injunction. The court found that the defendant’s continued actions after the plaintiff’s demand letter “establishes defendant does not respect plaintiff’s intellectual property rights and there is no guarantee defendant will not continue its infringing acts.” Therefore, because the plaintiff would suffer irreparable injury, and the balance of hardships was in plaintiff’s favor, and the public interest would not be dis-served by an injunction, the court granted the permanent injunction.

But the injunction did not stop there. The court’s order also includes social media:

IT IS FURTHER ORDERED any third party internet service provider, website hosting provider, social media platform, or other entity, that facilitates the publication or display of content that constitutes a violation of paragraph 1 of this Order [the injunction described above], who is served with this Order, shall immediately disable access to and remove from public view, the prohibited content.

Although this case is a default judgment, it serves as a reminder to update your copyright and trademark injunction requests to include social media takedowns for infringing material.

]]>https://www.socialmedialawbulletin.com/2019/04/fore-an-interesting-copyright-and-trademark-default-judgment/feed/0https://www.socialmedialawbulletin.com/2019/04/fore-an-interesting-copyright-and-trademark-default-judgment/Uncharted territory — the UK sets sail towards regulation of ‘Online Harms’http://feeds.lexblog.com/~r/SocialMediaLawBulletin/~3/DjiSbAWh7Ec/
https://www.socialmedialawbulletin.com/2019/04/uncharted-territory-the-uk-sets-sail-towards-regulation-of-online-harms/#respondThu, 18 Apr 2019 08:00:15 +0000https://www.socialmedialawbulletin.com/?p=2304Last week, the UK Home Secretary unveiled tough new plans to regulate social media platforms in the White Paper ‘Online Harms’ (the Paper). The Paper sets out a regulatory framework to tackle illegal and harmful online activity, in a flagship move which will require careful attention from social media platforms operating in the UK. The … Continue reading

]]>Last week, the UK Home Secretary unveiled tough new plans to regulate social media platforms in the White Paper ‘Online Harms’ (the Paper). The Paper sets out a regulatory framework to tackle illegal and harmful online activity, in a flagship move which will require careful attention from social media platforms operating in the UK.

The Paper is a product of the Government’s ambition to develop a regulatory landscape which has its stated aim for “the UK to be the safest place in the world to go online, and the best place to start and grow a digital business.”

The current framework

Under the E-Commerce Directive, social media platforms are liable for any illegal content they ‘host’, which they have actual knowledge of, or have constructive knowledge of and have failed to act ‘expeditiously’ to remove. Content that is legal, but harmful, is self-regulated by each individual social media platform.

The proposed framework

Social media platforms will have a new statutory duty of care towards their users. They will need to comply with guidance set out in a proposed “code of best practice” to appropriately tackle harm caused by content or activity on their services. An independent regulator will oversee and enforce compliance with the code of practice. Its enforcement powers include substantial fines and notices, and may extend to the ISP blocking of non-compliant websites and a senior management liability regime.

The parameters of the new regime have not been established, and the Government has invited consultation until 1 July 2019 on certain issues, such as:

the ability of designated bodies to bring “super complaints” to the regulator;

the extent of the enforcement powers of the regulator; and

the nature of the regulator itself.

Considerations for social media companies

The proposed regime is extremely high level and much needs clarifying. Two issues of note which will likely be addressed are the following:

Ambiguity of “online harms”

The Paper defines “online harms” extremely broadly. It covers both “harms” which are currently illegal, such as the dissemination of terrorist material or extreme pornography, and also “harms with a less clear definition”, such as disinformation or cyberbullying.

The ambiguity of this second category poses obvious issues for social media platforms who may be unsure as to whether certain activities on their site constitute an “online harm”. Concepts such as “disinformation” are also inherently unclear, and will require clarification to establish scope. Given the subjectivity of “harm”, the new duty of care is widely drawn, leaving social media platforms to calibrate their own approach to the treatment of risky, but “legal”, content.

More broadly, the regulation treats legal and illegal harms as indistinguishable. This is likely to conflate legal and social issues in a way that could be burdensome for social media platforms to manage. We expect these concepts to be clarified as the proposal is progressed.

Standardised approach

The scope of the legislation that the Paper proposes is vast. It applies to any website that “allows users to share or discover user-generated content, or interact with each other online”, which includes any site with a comment section, messaging service or file-hosting site, regardless of size or prominence.

This blanket approach as it stands is likely to pose issues particularly for smaller social media platforms and start-ups. Whilst the Paper acknowledges that it will focus on those social media companies that “pose the biggest and clearest risk to users”, the standardised approach to compliance could impact smaller social media platforms disproportionately compared to dominant multi-nationals. In this regard, we expect the Government will look to shield start-ups from any unintended consequences, such as stifled innovation in the tech sector.

Conclusions

There is now a consultation period ending on 1 July 2019. It will undoubtedly attract much comment from every corner of the industry and interested parties, with some asserting attacks on freedom of speech and others lobbying for even stricter controls. Interested parties need to make sure they are heard and should contribute to the debate. Find out how to do so.

Whilst the shape and scope of the proposal will change as it evolves, it is clear that a significant regulatory overhaul is on the horizon. Without a doubt, it is important for parties to keep a careful eye on developments and plan accordingly. We will be providing bulletins as issues come into focus.

Special thanks to Sally Hughes, a Trainee Solicitor in our London office, for her assistance in drafting this post.

]]>https://www.socialmedialawbulletin.com/2019/04/uncharted-territory-the-uk-sets-sail-towards-regulation-of-online-harms/feed/0https://www.socialmedialawbulletin.com/2019/04/uncharted-territory-the-uk-sets-sail-towards-regulation-of-online-harms/Monkeying around on social media could land you with a defamation suithttp://feeds.lexblog.com/~r/SocialMediaLawBulletin/~3/52fORs-7Xvg/
https://www.socialmedialawbulletin.com/2019/04/monkeying-around-on-social-media-could-land-you-with-a-defamation-suit/#respondTue, 16 Apr 2019 08:00:23 +0000https://www.socialmedialawbulletin.com/?p=2297As a wise person once said, truth often is stranger than fiction. The US Court of Appeals for the Fourth District of Texas (the “Appellate Court”) recently decided Hosseini v. Hansen, a bizarre case involving the intertwining of a tax preparation business, primate trainers and enthusiasts, and a defamation claim. Despite the unique factual circumstances, … Continue reading

]]>As a wise person once said, truth often is stranger than fiction. The US Court of Appeals for the Fourth District of Texas (the “Appellate Court”) recently decided Hosseini v. Hansen, a bizarre case involving the intertwining of a tax preparation business, primate trainers and enthusiasts, and a defamation claim. Despite the unique factual circumstances, the case provided good general insight into social media use as it relates to defamation.

The plaintiff in this case sued a group of primate enthusiasts for defamation that she alleged damaged her tax preparation business. When a jury found in favor of the plaintiff and awarded her US$315,000, the defendants filed a motion for judgment notwithstanding the verdict, which the trial court granted on the grounds that it thought the evidence presented could not support the verdict. The Appellate Court reversed the trial court’s judgment and remanded the case.

The plaintiff owned a tax preparation business and, like many small businesses, used various social media platforms to advertise her services. She also happened to be a primate trainer and owner and was involved in various online communities relating to resources about primates and primate ownership.

After the plaintiff came across a disturbing social media page promoting primate abuse, she reported the page to the social media platform, who removed the page. The disturbing page was posted by a social media group that contained several of the defendants in the case. According to the plaintiff, as a result of the removal, the defendants engaged in an extensive social media defamation campaign against the plaintiff. According to the plaintiff’s testimony, among the defendants’ actions were: posting threats against the plaintiff; posting images of the plaintiff, her family, and their home; offering to pay the bail of anyone who entered her business and physically harmed her; and targeting the plaintiff’s social media contacts and encouraging them to remove themselves from the plaintiff’s social media groups.

In addition to the actions above, the plaintiff presented evidence that the defendants made accusations that the plaintiff had been convicted of welfare and check fraud, had been raided by the IRS, and had posted her tax clients’ social security numbers on a social media site. During peak tax season, the defendants sent a news crew to the plaintiff’s place of business to investigate a stolen monkey. The Appellate Court noted that, in fact, the record reflected that the plaintiff purchased a sick monkey from an animal sanctuary for US$5,000 so she could obtain medical care for the monkey after the sanctuary had reached out explaining that it was having difficulty finding medical treatment. The sick monkey had previously been surrendered to the sanctuary by one of the defendants in the case.

At trial, the plaintiff presented evidence that, as a result of the defendants’ defamation campaign, her tax preparation business lost income and she was forced to close one of her three business locations and increase security measures.

In order for a plaintiff to prevail on a defamation claim, the plaintiff must prove that the defendant (1) published a false statement, (2) that was defamatory concerning the plaintiff, (3) with negligence regarding the truth of the statement (if the plaintiff is a private individual), and (4) the defendant’s actions proximately caused the plaintiff’s damages.

The Appellate Court noted that the defendants’ social media posts were communicated in writing on the plaintiff’s social media pages and were shared and commented on by various other users, which is consistent with the “publication” requirement for defamation. Because this case involved claims that the plaintiff committed a crime, the alleged defamation was characterized as defamation per se, rather than defamation “per quod,” meaning that general damages are presumed without requiring specific evidence of harm to the plaintiff’s reputation. The Appellate Court nonetheless noted that the evidence supported a conclusion that the plaintiff’s business was, in fact, harmed by the defamatory claims. The plaintiff claimed that she lost business and had to close a location and that membership in one of her online social groups dwindled from 700 to 200 members.

Ultimately, the Appellate Court found in favor of the plaintiff and reversed the trial court’s decision to grant the defendants’ motion for judgment notwithstanding the verdict. According to the Appellate Court, sufficient evidence was presented at trial to support the jury’s findings.

This case reinforces the idea that social media activity can satisfy the “publication” requirement for defamation and that courts continue to apply legal principles created in a pre-digital age world to the changing technological landscape.

]]>https://www.socialmedialawbulletin.com/2019/04/monkeying-around-on-social-media-could-land-you-with-a-defamation-suit/feed/0https://www.socialmedialawbulletin.com/2019/04/monkeying-around-on-social-media-could-land-you-with-a-defamation-suit/Social media influencer advertising in Canadahttp://feeds.lexblog.com/~r/SocialMediaLawBulletin/~3/eZK5bFNKP3w/
https://www.socialmedialawbulletin.com/2019/03/social-media-influencer-advertising-in-canada/#respondFri, 29 Mar 2019 14:17:13 +0000https://www.socialmedialawbulletin.com/?p=2294Influencer marketing is increasing in popularity in Canada and can be an effective way to promote your brand. Influencers are online personalities that use social media to share their expertise and opinion about products or brands with their followers. In order to tap into the influencer’s network, businesses pay or otherwise compensate influencers to share … Continue reading

]]>Influencer marketing is increasing in popularity in Canada and can be an effective way to promote your brand. Influencers are online personalities that use social media to share their expertise and opinion about products or brands with their followers. In order to tap into the influencer’s network, businesses pay or otherwise compensate influencers to share content that features their products or brand. Influencer marketing comes in all shapes and sizes. For example, it includes a social media model promoting a certain brand of makeup or an athlete recommending a particular piece of workout gear. Recently, even the Government of Canada has utilized influencer marketing to disseminate information regarding the dangers of opioid usage among young people.

Regulation of influencer marketing in Canada

In Canada, the Competition Act (the Act) regulates misleading and deceptive marketing practices. Despite the fact that influencer marketing may operate differently from traditional advertising, the Competition Bureau has made it clear that the Act also applies to influencer marketing. In its Deceptive Marketing Digest, the Bureau states, “The Competition Act prohibits misleading advertising and deceptive marketing practices. These provisions apply to influencer marketing just as they do to any other form of marketing.”

Apart from the Act, Advertising Standards Canada (ASC), an industry body committed to creating and maintaining community confidence in advertising, also places restrictions on influencer marketing. The ASC has promulgated its Canadian Code of Advertising Standards (the Code), which sets the criteria for acceptable advertising. Under the Code, consumers, advertisers, and special interest groups have the ability to make complaints, which can result in the advertiser being required to amend or withdraw the impugned advertisement. The Code requires influencers to disclose any “material connection” between themselves and the entity making the product available to the influencer. “Material connection” is broadly defined and means any connection that may affect the weight or credibility of the representation, including benefits, monetary or other compensation, free products, discounts, gifts, contest and sweepstakes entries, and any employment relationship.

In January 2019, ASC recently updated its Disclosure Guidelines for influencer marketing, which include several Do’s and Don’ts for disclosure. Some recommended practices from ASC are as follows:

Disclosures should be clear and use widely accepted hashtags such as #ad or #sponsored;

Disclosures should be independent of social media network or channel specific settings. For example, using the social media platform settings to link the account with the advertiser does not necessarily mean there has been effective disclosure;

In videos, disclosures should be upfront;

Disclosures should be made in the language of the endorsement;

Disclosures should be in close proximity to the endorsement;

Disclosures should be specific about the brand, product, and what was given; and

Disclosures should be clearly communicated and should be written in unambiguous language.

Takeaways

Influencer marketing is a valuable way to promote your brand. However, when engaging with influencers, companies should ensure that they effectively disclose their connection with their brand in an upfront and clear manner. Failure to do so can attract liability under the Act as well as result in non-compliant advertisements pursuant to the Code. In addition, there are reputational risks with failing to disclose such material connections.

]]>https://www.socialmedialawbulletin.com/2019/03/social-media-influencer-advertising-in-canada/feed/0https://www.socialmedialawbulletin.com/2019/03/social-media-influencer-advertising-in-canada/New California laws may require review of social media policieshttp://feeds.lexblog.com/~r/SocialMediaLawBulletin/~3/8AnNd-r2NgM/
https://www.socialmedialawbulletin.com/2019/03/new-california-laws-may-require-review-of-social-media-policies/#respondFri, 08 Mar 2019 08:00:44 +0000https://www.socialmedialawbulletin.com/?p=2291The use of social media by employees is as fraught as it is widespread, and creates tremendous legal risk for the employer. Indeed, employers are wise to require adherence to a thorough policy regarding employee use of social media both inside and outside of work. The best policies will aim to sidestep potential legal landmines … Continue reading

]]>The use of social media by employees is as fraught as it is widespread, and creates tremendous legal risk for the employer. Indeed, employers are wise to require adherence to a thorough policy regarding employee use of social media both inside and outside of work. The best policies will aim to sidestep potential legal landmines by preventing unauthorized disclosure of the company’s trade secrets and other confidential information, violations of the Federal Trade Commission Act arising from an employee’s promotion of company products, infringement of third party intellectual property rights, employee harassment, and privacy violations.

On the other hand, social media policies are liable to overreach. For instance, Section 7 of the National Labor Relations Act guarantees employees the right to engage in collective bargaining and other concerted activities for the purpose of mutual aid or protection. The National Labor Relations Board has extended this right to employee social media activity. Now, bills signed into law last year in California may further limit the ability of employers to restrain employee use of social media, and require revision of current policies.

In 2018, California passed a number of new laws affecting the relationship between employer and employee. Among these new laws were amendments to the Code of Civil Procedure and the Fair Employment and Housing Act (“FEHA”). One law limits the ability of employers to include nondisclosure provisions in settlement agreements arising from claims of sexual harassment. See Cal. Code Civ. Proc. § 1001. Although certain portions of the settlement may still be subject to confidentiality provisions—such as the amount of settlement, and the identity of the victim—the agreement may not prevent the employee from disclosing the facts underlying the claim. Another law prohibits employers from requiring current employees to sign non-disparagement agreements which would prevent employees from disclosing information about unlawful acts in the workplace, specifically relating to sexual and other forms of harassment. See Cal. Gov. Code § 12964.5.

Many social media policies currently require non-disparagement and employee protection of the company’s goodwill and business reputation. In light of these new laws, those policies may have to be revised to avoid language which may be construed as preventing the disclosure of facts related to sexual harassment in the workplace. For example, the following language would stay within the bounds of these new laws while still preventing disparagement:

Use good judgment about what you post and remember that anything you say can reflect on the Company. Always strive to be accurate in your communications about the Company and remember that your statements have the potential to result in liability for you or the Company. You should not post any defamatory or disparaging remarks, comments, or statements concerning the Company, its business, employees, products, or customers. Notwithstanding the foregoing, the policy does not, in any way, restrict or limit your ability to disclose facts relating to certain claims for sexual harassment in the workplace, testify truthfully in any public forum, exercise any protected rights, or comply with any applicable law or valid order of a court of competent jurisdiction or an authorized government agency.

Failure to adjust social media policies may result not only in the voiding of the entire nondisclosure or non-disparagement provisions, but can also create public-relations headaches and damage employee morale. Be sure to consult with a California employment attorney before making any substantive changes to your employee policies and procedures.

]]>On February 7, 2019, a federal trial court in California ruled in favor of a social media influencer’s copyright, trademark, interference with contract, and right of publicity class action lawsuit and denied the defendant’s motion to dismiss. As a result, the social media influencer can proceed with their claims that the defendant website copied social media photos and information but removed the links used by the influencer to monetize social media pages. (Batra v POPSUGAR, Inc., No. 18-cv-03752-HSG (N.D. Cal. Feb. 7, 2019) (2019 WL 482492).

The plaintiff, a social media influencer, filed a class action lawsuit in federal court, on behalf of herself and other social media influencers, claiming that the defendant website had violated their rights in six ways:

Removed/altered their copyright management information, in violation of the DMCA;

Made false or misleading representations of endorsement in violation of the Lanham Act;

Misappropriated the social media influencers’ likenesses and infringed their right of publicity;

Violated California’s unfair competition law;

Intentionally interfered with plaintiffs’ contractual relationship with the site monetizer; and

Infringed the copyright in the photos posted on the social media pages.

DMCA

Although many of our readers think of the Digital Millennium Copyright Act (DMCA) in connection with the “notice and takedown procedure” on websites, the DMCA made it a violation of the federal copyright law to remove from the work the name and other identifying information of the author of a work—so-called “copyright management information” or “CMI.”

In this case, the plaintiff’s posts typically included a photo and a sidebar with identifying information about the author, including the author’s name and links to personal websites or social media pages.

The court found that the plaintiff’s claim survived the defendant’s motion to dismiss because the defendant allegedly scraped the photos without the sidebar’s CMI. In addition, the court found a “plausible inference” that the defendant removed that information “knowing that removing the CMI would help to conceal the alleged infringement of plaintiff’s images.”

Lanham Act

The plaintiff claimed that the use of the social media influencers’ names falsely implied that they endorsed or were otherwise affiliated with the defendant’s site in violation of the federal Lanham Act. The defendant claimed that the relevant goods and services for Lanham Act purposes were those that users actually purchased from the defendant’s site. The court disagreed.

The court found that the complaint alleged consumer confusion not in the product endorsements on the site, but rather in the consumer’s impression that the influencer endorsed the defendant’s site and services thereunder.

Preemption of state law claims

The defendant claimed that the plaintiff’s three state law claims (right of publicity, violation of California’s unfair competition law, and interference with contract) were preempted by the federal copyright law. Our readers are probably aware that the U.S. copyright law preempts state law claims that are “equivalent to any of the exclusive rights within the general scope of copyright” (17 U.S.C. § 301(a)). The Ninth Circuit uses a two-part test to determine whether a state law claim is preempted:

Does the state law claim fall within the subject matter of copyright?

If so, are the state law rights asserted equivalent to the exclusive rights under the copyright law?

Although photographs can be the subject matter of copyright, in this case, the plaintiff claimed infringement of her right of publicity—not only her likeness, but elements of her identity. Therefore, the court found that this right was not equivalent to exclusive copyright rights.

Similar, the tortious interference with contract claim involved the defendant’s alleged removal of the monetization links that were associated with the influencers’ images—not simply copying the images themselves. Therefore, the court ruled that these right were not equivalent to exclusive copyright rights.

Finally, with respect to the California unfair competition claim, because that claim relied on the same facts as the tortious interference claim, the court ruled that claim was also not preempted.

Contract interference

Moving on to the interference with contract claim, the plaintiff had the burden to show five elements:

A valid contract between the plaintiff and a third party;

Defendant’s knowledge of the contract;

Defendant’s intentional acts, designed to induce a breach or disruption of that contract;

Actual breach or disruption of the contract; and

Resulting damage.

The court found that the plaintiff had pled sufficient facts to move forward. With respect to elements 2 and 3 above, the court found that the defendant had knowledge of the influencer’s contract with the third party and the defendant had “general knowledge of the common industry practice of affiliate marketing,” plus the defendant’s intentional removal of the monetization links prevented performance of that contract.

Copyright infringement

Finally, the plaintiff alleged copyright infringement with respect to the photos appearing on the social media pages. Plaintiff alleged that the class members had either registered the copyright in the photos or had applied for registration. The court found this allegation was sufficient at this time.

Takeaways

This case is in the very early stages, but it can serve as a warning to anyone considering copying online content: it can be a very expensive way to land in federal court.

]]>https://www.socialmedialawbulletin.com/2019/02/social-media-influencers-and-scraping/feed/0https://www.socialmedialawbulletin.com/2019/02/social-media-influencers-and-scraping/Banning critics from social media can constitute a First Amendment violationhttp://feeds.lexblog.com/~r/SocialMediaLawBulletin/~3/Hfsod3EFLKw/
https://www.socialmedialawbulletin.com/2019/02/banning-critics-social-media-can-constitute-first-amendment-violation/#respondTue, 05 Feb 2019 08:00:23 +0000https://www.socialmedialawbulletin.com/?p=2281The question of whether a public official may legally suppress dissent or criticism by banning dissenters from social media pages administered by the public official has recently entered the United States’ legal discourse.… Continue reading

]]>The question of whether a public official may legally suppress dissent or criticism by banning dissenters from social media pages administered by the public official has recently entered the United States’ legal discourse. The Fourth U.S. Circuit Court of Appeals recently answered this question in Davison v. Randall, which was the first decision on the issue made at the federal appellate level. The implications of this decision could prove to be particularly significant, as President Trump is currently appealing a decision by the U.S. District Court for the Southern District of New York. In President Trump’s case, the district court held that the President engaged in viewpoint discrimination when he blocked individuals from his social media account because the individuals posted tweets that criticized the President or his policies. The Davison case is significant because the circumstances surrounding that case are similar in many ways to President Trump’s case, which is currently being appealed.The Davison case concerns a social media page created and administered by Phyllis Randall, the Chair of the Loudoun County, Virginia, Board of Supervisors (the “Board”). The page allowed Randall to make public comments and permitted the public to comment on posts made by Randall, which Randall encouraged. Randall used the page primarily to discuss matters associated with Randall’s official responsibilities as Chair of the Board.

On February 3, 2016, Brian Davison, the Plaintiff-Appellee in the case, attended a town hall meeting at which Randall was present. At the meeting, Davison submitted a question implying that certain School Board members had conflicts of interest in connection with approving certain financial transactions, which Randall answered during the meeting. Subsequently, Randall posted to the social media site about the meeting and generally described what was discussed at the meeting. Davison commented on Randall’s post with a statement accusing School Board members’ and their families of conflicts of interest violations and accepting kickback money. Randall deleted the post and blocked Davison from using a particular page to make comments on Randall’s social media site, but subsequently “unbanned” Davison’s page approximately twelve hours later after reconsidering her actions.

Davison brought a suit against various parties, including Randall in her official capacity, seeking declaratory and injunctive relief under Section 1983 and alleging that the banning of Davison from commenting on the social media page was viewpoint discrimination in violation of the First Amendment of the US Constitution. The district court held in favor of Davison with respect to the First Amendment claim. The appellate court affirmed.

Among the various issues analyzed by the appellate court, two primary questions were (i) whether Randall acted under the “color of state law” to create state action and (ii) whether the social media page constituted a public forum.

To state a claim under Section 1983, a plaintiff must show that the alleged constitutional deprivation at issue occurred because of action taken by the defendant “under the color of . . . state law.” The appellate court noted that Randall created and administered the social media page to further her duties as a municipal officer. The page was used “as a tool of governance” to provide information to the public about Randall and the Board’s official activities and it “solicited input from the public on policy issues [Randall] and the [Board] confront.” Since Randall’s ban of Davison amounted to “an effort to suppress speech critical of [such members’] conduct of [their] official duties or fitness for public office,” the appellate court found further support that Randall’s action was taken under color of state law.

The appellate court also found that Randall’s social media page constituted a public forum under First Amendment law. Governmental entities are “strictly limited” in their ability to regulate private speech in public fora. The appellate court noted the various characteristics of the social media page that supported its conclusion that the page constituted a public forum. Randall intentionally opened the public comment section for public discourse and invited any citizen to make posts to the comments section of the page on any issues, which significantly created an interactive component. No restrictions were placed on the public’s access to the page, and the public made numerous posts on matters of public concern, consistent with Randall’s intentions to promote an exchange of views. Despite Randall’s argument that the site didn’t constitute a public forum because it was a private site, the appellate court noted that even if it were to concede that the site were private, the Supreme Court has held that private property can constitute a public forum when the government retains substantial control over the property under regulation or by contract. The appellate court notes that Randall “created the page,” “designated the page as belonging to a ‘government official’,” “clothed the page in the trappings of her public office,” “chose to list her official contact information on the page,” and “had complete control to ban other profiles from using Randall’s page.” The appellate court did not decide the issue of whether the social media site was a traditional public forum or a designated or limited public forum because viewpoint discrimination is prohibited in all fora.

Davison v. Randall is filled to the brim with interesting First Amendment issues and analyses, and is certainly worth a read for anyone interested in First Amendment law. If nothing else, it is yet another example of our laws adapting to the progression of technology. While the local courthouse steps may have once served as a community’s standard public forum, social media pages have become significant places for the exchange of information and the discussion of ideas. This case reminds us that governmental entities and public officials maintaining social media pages are subject to First Amendment principles and may not take measures to erase public criticism or stifle free discourse.

]]>https://www.socialmedialawbulletin.com/2019/02/banning-critics-social-media-can-constitute-first-amendment-violation/feed/0https://www.socialmedialawbulletin.com/2019/02/banning-critics-social-media-can-constitute-first-amendment-violation/Intermediary liability for internet services under NAFTA 2.0http://feeds.lexblog.com/~r/SocialMediaLawBulletin/~3/_q_IldXrBaY/
https://www.socialmedialawbulletin.com/2019/01/intermediary-liability-internet-services-nafta-2-0/#respondFri, 18 Jan 2019 12:02:33 +0000https://www.socialmedialawbulletin.com/?p=2277USMCA provision As organizations around the globe grapple with disinformation and fake news, the digital trade provisions in NAFTA’s successor may help assuage fears that internet content providers could be held responsible for such content. The US-Mexico-Canada Agreement (USMCA) contains important provisions dealing with the issues of free speech and digital trade.Article 19.17 of the … Continue reading

As organizations around the globe grapple with disinformation and fake news, the digital trade provisions in NAFTA’s successor may help assuage fears that internet content providers could be held responsible for such content. The US-Mexico-Canada Agreement (USMCA) contains important provisions dealing with the issues of free speech and digital trade.Article 19.17 of the USMCA relates to Interactive Computer Services (ICS) and provides:

[N]o Party shall adopt or maintain measures that treat a supplier or user of an interactive computer service as an information content provider in determining liability for harms related to information stored, processed, transmitted, distributed, or made available by the service, except to the extent the supplier or user has, in whole or in part, created, or developed the information.

It is important to note that this provision does not purport to remove all liability from digital intermediaries. Rather, this provision prohibits holding ICSs to the same standard as the content creators.

Current US law

Article 19.17 of the USMCA is largely adapted from section 230(c)(1) of the U.S. Communications Decency Act (CDA). The CDA states that:

No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.

An ICS is defined in the CDA as: “any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the internet and such systems operated or services offered by libraries or educational institutions.”

An Information Content Provider (ICP) is defined in the CDA as: “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the internet or any other interactive computer service.”

Although the CDA prima facie provides the same level of protection to ICSs as will the USMCA, some U.S. courts have interpreted this more broadly. In Chicago Lawyers’ Committee for Civil Rights Under the Law Inc. v Craigslist, Inc. (461 F. Supp. 2d 681, 2006 U.S. Dist. LEXIS 82973 (N.D. Ill. Nov. 14, 2006)), the U.S. District Court for the Norther District of Illinois stated that “Near-unanimous case law holds that 47 U.S.C.S. § 230(c) affords immunity to interactive computer services (ICSs) against suits that seek to hold an ICS liable for third-party content.” However, other courts have taken the more nuanced view that immunity from liability for third party content only exists where the ICP has merely passively displayed the content.

Are major changes coming to Canada?

It remains to be seen how Article 19.17 will be implemented in Canadian law. No statutory immunity exists for service providers and some courts have been willing to find liability for third party content. In Carter v. B.C. Federation of Foster Parents Assn., 2005 BCCA 398, the British Columbia Court of Appeal found that an internet forum should be held liable for failing to “take effective steps [to] remove defamatory content”.

Additionally, a similar concept exists in Canadian copyright law. The Supreme Court of Canada has found that an internet service provider may become liable for copyright infringement if it has notice of offending material posted on its server and fails to comply with the notice.

Although Canadian courts seem to be more willing to hold service providers liable, they generally do not hold service providers to the same standard as third party content creators under the current law. Although Canadian courts may choose to adopt U.S. jurisprudence with the introduction of Article 19.17, Canadian law in this respect may already be compliant with the USMCA.